Ann: Moody's Rating Review , page-8

The clay in the ore body has been there for a few million years, before that it was gabbro. That ATI have only just found out about it when it caused Xstrata issues screams "do your homework" to me. They didn't design the CMB to deal with it - make your own conclusion.

The market is made “prohibative” to new entrants because the vast majority of vanadium is from secondary production. The slide below, while pretty, is also wrong and probably illustrates Minosora’s understanding of the market quite well (I’d suggest he doesn’t understand it). Vanadium slag would better be classed as a secondary source since it is a bi-product of a steel making process. So, by my calcs 76% of production is from secondary sources and bi-product, while only 24% is from primary production (like Windimurra). Straight away, this makes market entrance dicey because the price you get for Vanadium is controlled more by steel supply / demand that Vanadium supply / demand.

So to stop a new entrant all the South Africans / Chinese / Russians have to do is produce more steel, force the price of Vanadium down, and squeeze out high cost producers like Windimurra. The high cost foreign producers can afford to do it because they a subsidised by governments to produce strategic commodities. Windimurra claims to be low cost but that’s an accounting trick. The foreign producers have excess capacity on steel production from vanadium-rich ores, but its an expensive way to do it.

Then there's the market, where its one of the few metals not traded on the LME, and the price is controlled by a few large producers. Plucky Windimurra is too below average to be in it.